TOLMAN REFLECTS ON TENURE, OFFERS INSIGHT INTO FUTURE FOR FARMERS

OCTOBER 2014

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(Posted Fri. Oct 10th, 2014)

On National Corn Growers Association Chief Executive Officer Rick Tolman’s final day in his position, he sat down with Off the Cob to discuss the changes that he has seen over his 14-year tenure and to share his perspective on the future facing corn farmers over the coming years.

Reflecting upon his time leading NCGA, Tolman explained the many ways in which the corn industry has evolved and the association’s unique role in shaping market growth and development over that time.

“When I think back, there have been many things that have occurred and a lot of changes,” said Tolman. “The first four years or so that I was CEO, which would have been about 2000 to 2004 or 2005, we were really focused on trying to deal with rural economic development. It was a time when prices had been low for quite some time. There was a lot of discouragement and disappointment in the farm sector because there wasn’t a lot of profitability. People were not encouraging their sons and daughters to come back to the farm. Schools were consolidating. It was just a kind of depressing time in rural America.

“One of the really remarkable things that NCGA did was to take a leadership role in looking at rural economic development. There were two reports that we put together. We had two task forces, and one was on rural ownership. It looked at what we could do in the rural sector to bring jobs back to rural economies. It wasn’t focused on corn at all. It was focused on all kinds of opportunities, from livestock opportunities to value-added opportunities. Then, we had a follow up report a year later that talked about some of these ownership models and how they could be structured, and it gave some advice for farmers and groups looking to incorporate. That coincided with the beginning of the biofuels revolution.

“During the next period of a couple of years, we spent a lot of time doing something called ‘So You Want to Build an Ethanol Plant.’ There were a lot of farmers who got excited about getting together with their co-op or another group of local farmers and putting an ethanol plant in their hometown. It was a great engine for rural economic development, but a lot of things were moving pretty quickly. It was kind of a dangerous time. Lots of money was involved. There was a lot of opportunity to be successful or fail.

“So, NCGA put on a rolling roadshow and went across the country. We set up in different locations and brought in experts on new ventures, on putting a business plan together, on legal structure, and gave a sort of checklist. It involved information on the things farmers would need to do and need to look from location to the utilities needed to the federal and local laws. Again, I think that it was a real service to the industry.

“Later on, as we got into the ethanol boom, we had a lot of success and exciting achievements. NCGA tried to withdraw as one of the major forces in shaping the ethanol industry and become more of a support for the industry that had emerged. We got into a period of time where there were conflicting factions within the ethanol industry. For a period of three years or so, we played a very crucial role in trying to pull that industry back together and create some unity. That culminated in what we have today as Fuels America.

“Those are the things that cross my mind as some of the bigger things that NCGA has played a pivotal role in during the time when I was fortunate enough to be the CEO.”

Having such a long tenure with NCGA, Tolman gained an in-depth understanding of the corn industry that provided him with a unique perspective on what farmers need to consider moving forward.

“Lately, I have been thinking about the unprecedented time that we went through from about 2006 to last year, 2013. We have had really good opportunities for profitability. We have had some ups and downs. There has been a lot of volatility but also a lot of strong prices. Farmers have had a lot of opportunity to lock in some profits and do well. We have seen the entire sector do well and a lot of return on investment for the equipment companies and for the tech providers. It has been a very good time for all of agriculture.

“Now, we are moving into a period where it looks like we are going to be back to where we were pre-2006 with burdensome surpluses, lower prices and a little less opportunity to make some money.

“What I would remind farmers and the sector is that we have been there before. We have seen this. This is part of the boom-and-bust cycle that we have being a commodity organization and commodity agriculture. It is when we have those times when we have low prices that people get innovative and think about new ways to use things.

“Somebody out there is going to say, ‘Hey, that corn has pretty low prices right now. It is a great source of starch, carbon, sugars.’ I think we’ll have a real opportunity to create some new markets and create some new, innovative ways to use our product. We just need to be patient and remain opportunistic as we wait for those ideas to come along.”

Looking ahead, Tolman urged growers to become increasingly involved in telling the story of agriculture as it will be essential to the industry’s future success.

“It is a brave new world out there. Because of the success that we have had the last four, five or six years, we have placed ourselves in a much more engaged role with consumers and the non-farm public. We are finding that they don’t understand our business. While they are directly connected to it, they do not understand it.

“I encourage our members to get engaged if you are not and, if you are, get more engaged. We can no longer just think about ourselves as being producers of a product. We have to realize that we are intimately engaged with the lives of everyday Americans in the food that they eat, the clothes that they wear and the fuel they put in their vehicles. So, you have these touch points. They want to know who you are and what you are doing because you are affecting their lives, their children’s lives, their grandchildren’s lives.

“It is really important because there are so few of us and so many of them for every farmer to get involved. We need to go out to tell our story and explain what we do. When we do that, we change minds and create understanding that will be crucial going forward.

“There are people who want to spread misinformation, whether maliciously or not, and it is up to us to set the record straight. It is every farmer’s responsibility to speak with consumers, to speak with their friends, family, neighbors and urban and suburban counterparts, and tell their story. I challenge them to do so.”